Indian economy may recover faster than expected, says Oxford Economics; makes RBI claim

In a massive boost to country amid COVID-19 crisis, Oxford Ecomics has indicated that  Indian ecomy is seen recovering faster than expected and Reserve Bank of India is likely to have come to an end of rate easing cycle. re has been a strong recovery in India's state of ecomy over last couple of months, even as country continues to tackle COVID-19 pandemic.

Giving a ballpark figure, firm said that inflation is expected to aver significantly above 6 percent in fourth quarter of current fiscal and RBI may hold policy rates in its December monetary policy review meeting.

"Consumer inflation rose back to pre-virus highs in October, with almost every bro category or than fuel experiencing a rise in prices. While Q4 is likely to mark peak for inflation, we have turned more cautious on trajectory over 2021," it said.

Furr citing cost of vegetables and eggs, firm said that pushed up retail inflation to a nearly six-and-a-half-year high of 7.61 percent in October, keeping it significantly above comfort zone of Reserve Bank. Meanwhile, retail inflation stood at 7.27 percent in September 2020.

"At same time, robust bottom-up activity data suggest that ecomy may be recovering faster than we anticipated. As such, we see an increasing possibility that RBI's easing cycle has ended," Oxford Ecomics said.

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'Indian ecomy returning to positive growth'

Meanwhile, Union Finance Minister Nirmala Sitharaman on Thursday said that Reserve Bank of India (RBI) has predicted a strong likelihood of Indian ecomy returning to positive growth in Q3:2020-21. dressing a press conference, she said that re has been very good progress on 'One Nation-One Ration Card' in 28 states and Union territories covering 68.6 crore beneficiaries.

"RBI predicts a strong likelihood of Indian ecomy returning to positive growth in Q3:2020-21, ahe by a quarter of earlier forecast," Sitharaman said at a press conference. re has been very good progress on 'One Nation-One Ration Card' in 28 states and Union territories covering 68.6 crore beneficiaries. On Interstate Portability, 28 states and UTs have been brought under national portability of ration cards with effect from September 1, 2020," said FM.

While Minister of State (MoS) Anurag Thakur said, "Markets are on a record-high and India's foreign exchange reserves are at $560 bn. India has me a strong comeback ecomically. RBI has said that India will do better in Q4. So mood in country, as well as Moody's rating for India, has improved."

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(With Inputs from PTI)